New BMA Guidelines Require Notification Of Outsourcing Arrangements And Ongoing Monitoring

The Bermuda Monetary Authority (BMA) has released Guidance Notes for Relevant Legal Entities, including banks, corporate service providers, trust companies, investment businesses and fund administrators, which require them to demonstrate good risk management and to notify the BMA of any new material outsourcing arrangements. The guidelines come into force on 1 May 2020. Until that time there is a transition period during which entities should provide attestation for pre-existing arrangements, and seek prior approval or provide attestation for new outsourcing arrangements.

Over the last three years there has been an increase in the use of outsourcing by entities such as investment businesses, fund administrators, banks, deposit companies, corporate service providers, trust companies, money service businesses, and credit unions licensed by the BMA. The BMA has issued updated Guidance Notes for these "Relevant Legal Entities" (RLEs) to ensure risks from outsourcing are